As a business leader, it is all too easy to get pushed into investing in technologies prior to understanding the market. Or perhaps you’re trying to find a market for a technology that already exists in your organisation but has yet to be exploited. This may seem an obvious and cost effective approach. But beware!
Remember the story of NASA developing the elaborate pump action space pen that could write in zero gravity; whereas the Russians used pencils! Well it’s not actually true, but it does illustrate the point. When you find a market for your blockbuster technology – do double check that there isn’t a simpler solution already out there.
In my first job, we made a similar mistake. We had an exotic Optical Correlator technology that could find simple patterns in video feeds. I’ll spare you the gobbly-gook but the implementation was anything but simple.
First the system of lasers, lenses and spatial light modulators had to be mounted on a slab of granite to remove any vibration. Next there was a large box of electronics to drive the system and finally the whole configuration had to be cooled to prevent overheating and to keep the system stable. Although cumbersome, it did work and was very fast at finding edges in video or even patterns such as military tanks which was the intended application.
However, there was a simpler way that used computers to directly perform the same task. In fact nowadays; the same operation can even be performed in Paint Shop Pro on your home computer. Of course, in my R&D lab this is not what we wanted to hear. It was just so much more fun to experiment with the exotic rather than use plain old pencils!
And yet, technology push can work. Just think of the Television, iTunes or the Word Processor. So what made the difference? Well for starters the technology was compelling, in other words:
1. Customers valued the improved performance as a result of the technology
2. There wasn’t a simple alternative way to achieve these same benefits
However, there is more to technology push than just improved performance. Clayton Christensen observed in his book “The Innovators Dilemma”, when the best firms succeeded, they did so because they listened responsively to their customers and invested aggressively in the technology, products, and manufacturing capabilities that satisfied their customers’next-generation needs.
But, paradoxically, when the best firms subsequently failed, it was for the same reasons–they listened responsively to their customers and invested aggressively in the technology, products, and manufacturing capabilities that satisfied their customers’ next-generation needs.
It is not enough to just improve performance along the already known “vectors of differentiation”. Just because a customer valued an improvement in the past, doesn’t mean that they will value further improvement in that direction. In fact, customers rarely state when things are “good enough”.
Instead, a blockbuster technology should also bring new benefits that the customer never even thought about before. They should irreversibly change the rules of the game. It’s called disruption of the market place.
Often disruptive technologies are not even hard to develop, they maybe just a new configuration of existing proven technologies. For instance, Apple didn’t invent the Internet, compressed music files, MP3 players or download systems. Instead they just put those technologies together in a unique way that has seriously challenged the Music Industries previous distribution business model.
Which leads me to my last point, usually the market disrupter is not one of the existing incumbents in a marketplace. Instead, they are invariably a newcomer with nothing to lose by the destruction of the old order!